Almost Never Films Inc. (OTCBB:HLWD) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
On December 12, 2016, Almost Never Films, Inc. (ANF) entered into
a collaboration agreement (the Agreement) with Saisam
Entertainment, LLC (SAE, and together with ANF, the Parties). to
the Agreement, the Parties will create an LLC or other entity
(the Company), for the purpose of developing, producing and
exploiting proposed motion picture project currently entitled
Love is not Easy (the Picture). SAE owns and controls the rights
to the screenplay for the Picture (the Screenplay).
The Parties intend to create a single purpose LLC or other entity
for the purpose of developing, producing and exploiting the
Picture (the Company). SAE will contribute its development and
producing services to the Company, will assign all rights in and
to the Screenplay to the Company ( to the terms of an option
purchase agreement between SAE and ANF, which shall contain,
amongst other terms, an initial option fee of Ten Thousand
Dollars ($10,000) for an option period of eighteen (18) months,
and a lien for all of ANFs out of pocket costs in the event of a
reversion), and shall assist in the raising of additional
financing. Upon the expiration of the 18 months both parties will
negotiate in good faith for an extension of the property. ANF
shall assign all rights acquired to the option purchase agreement
to Company upon commencement of pre-production. ANF will make or
source financial contributions in accordance with the terms of
this Agreement, assist in the raising of additional financing (if
required) and participate in the development and production
process as set forth more fully herein. The Company will own 50%
of the copyright to the Picture and all other ancillary and
related rights, and each of SAE and ANF will own an undivided 50%
interest in the Company. ANF will be the managing member of the
Company. The operating agreement for the Company will be
negotiated in good faith by the Parties, but in any event shall
be consistent with the terms of this Agreement.
Following formation of the Company, SAE will develop the Picture
for possible production. In this regard, SAE will perform all
reasonable and customary development services rendered by
producers of first-class motion picture productions. In addition,
upon completion of the foregoing development activities, SAE, in
consultation with ANF, will use good faith reasonable efforts to
secure additional financing for the Picture (if required).
The parties intend to produce with Picture for an approved budget
of approximately Two Million Dollars ($2,000,000), which the
parties intend to fund via the Investment (as defined below),
with the difference covered by production tax incentives paid via
a state or country in which the Picture is produced (with the
understanding that Company may secure a loan against an estimate
of such tax credit proceeds). Upon satisfaction of the Funding
Conditions (as defined below), ANF will use good faith reasonable
efforts to provide or source equity financing for the Picture in
the amount of approximately $1,300,000 (the Investment). The
Investment will be held in the designated Company bank account
until such time as the Parties have obtained a completion bond
for the Picture (if Company elects to have the Picture bonded)
and secured agreed-upon financing to cover anticipated tax
credits or incentives, in accordance with the approved finance
plan. In this regard, ANF and SAE will mutually approve a budget,
finance plan and cash flow for the Picture.
ANF or financing sources secured by ANF may elect to allow for
the use of funds, to a mutually approved draw down schedule, from
the Investment prior to the entire amount of the Investment being
secured, if they so elect in their sole discretion, In the event
the equity investors (including ANF) in the Picture do not permit
funds to be drawn down prior to the entire amount of the
Investment being secured, then ANF will provide sufficient
funding to cover certain mutually- approved development expenses
(e.g., engaging a casting director, location scout, line
producer, etc.) (the Development Advance), which Development
Advance will be repaid to ANF (plus a return thereon at an
annualized rate of 20%) as a budgeted production cost on the
first day of principal photography of the Picture. The budget of
the Picture will be increased (i.e., grossed-up) to cover the
amount of the Development Advance and the premium return thereon.
In consideration of ANF (or its source) actually providing the
Investment, the following terms and conditions will apply: (i)
ANF (and/or its source, as applicable) will receive a Preferred
Return of 120% of the Investment or portion thereof (i.e., the
amount of the Investment plus an additional return of 20%
thereon). ANF (and/or its source) will recoup the Preferred
Return immediately after the deduction from gross receipts of the
following: distribution and sales fees and expenses, collection
account fees (if any), union residuals (or a reserve established
for the payment of union residuals), repayment of debt (if any).
After ANF and any applicable sources have received the Preferred
Return in full, the remaining gross receipts after the deduction
of the other ongoing expenses set forth above shall be deemed Net
Profits, and shall be payable to any approved deferments and
thereafter to Net Profits participants; and (ii) All Net Profits
derived from the Picture and all rights therein and by-products
thereof shall be allocated Fifty Percent (50%) equity investors
in the Picture (the Investors Share), based on the proportion
such investors contribution bears to the entire amount financed
(i.e., the total equity invested in the Picture). By way of
illustration only, if a third party investor contributes $500,000
of a total equity raise of $1,000,000, then such investor will be
entitled to receive 50% of the Investors Share (i.e., 25% of 50%
of all Net Profits) The remaining Fifty Percent (50%) of Net
Profits shall be allocated to the Producers Pool, provided that
all third party participations shall be allocated and payable
from the Producers Pool (i.e., any percentage thereof granted to
actors, crew, etc.).
If the Picture is produced, the following terms and conditions
will apply: (i): Brian Hooks, Danny Chan and Frank Gillen will be
engaged as the lead producers of the Picture on terms to be
negotiated in good faith, and (ii) Brian Hooks will be engaged as
the writer and director of the Picture on terms to be negotiated
in good faith.
Prior to the date of the Agreement, ANF had no interaction, other
than the negotiation of the Agreement, with SAE.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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10.1 |
Collaboration Agreement, by and between Almost Never Films, |
About Almost Never Films Inc. (OTCBB:HLWD)
Almost Never Films Inc., formerly SMACK Sportswear, is a shell company. The Company is a film company focused on film production and production related services in connection with genre specific motion pictures. It was a manufacturer and seller of performance and lifestyle-based indoor, and sand volleyball apparel and accessories. It is focused on seeking a business opportunity. It will attempt to locate and negotiate with a business entity for the merger of that target company into the Company. Its proposed business is to facilitate relationships (provide production-related services) between creative talent (including writers, actors and directors) and companies producing, financing and distributing motion pictures. It is focused on engaging third parties to produce, finance and exploit/distribute the motion picture packages. It may also provide production capability to the third-party producer and/or financier of the motion picture in question. It had not generated any revenues. Almost Never Films Inc. (OTCBB:HLWD) Recent Trading Information
Almost Never Films Inc. (OTCBB:HLWD) closed its last trading session 00.0000 at 0.0177 with 1,334 shares trading hands.